Troubled times for Thomas Cook.
Troubled tour giant Thomas Cook has pledged to beef up UK sales after a big drop in profits on holiday sales in 2011. The share value of the holiday tour firm has dropped by two-thirds since January as poor trading in the UK and unrest in the Middle East and Africa hit sales. Thomas Cook blames political unrest in North Africa and difficult trading conditions in the UK for the under performance.
Now the travel company has announced a 'fundamental strategic and operational review of the business' in the UK.
Thomas Cook got a boost recetly when the Competition Commission backed the proposed merger of its UK retail business with that of the Co-operative group to create Britain's biggest retail travel business.
Now chief executive Manny Fontenla-Novoa is under increasing pressure to turn sales around.
He has defended the strategy of high street expansion with Co-op Travel even though more holidaymakers are using the internet to book holidays. He insists many customers prefer face-to-face contact.
Thomas Cook carries a significant number of holiday package holidays in the Greek islands but has failed to sell well on the Greek holiday website Greek Island Holidays where sales have been heavily dominated by TUI rivals Thomson.
Although there is plenty of interest in Thomas Cook holidays offered on the Greek Island Holidays website, conversions have been low and actual sales to the end of July are running at 0.05% of those achieved by Thomson.
Thomas Cook Group plc, the Co-operative Group and the Midlands Co-operative agreed to merge their high street travel and foreign exchange businesses last year.
The move created the UK's largest high street travel network with more than 1,300 shops. Thomas Cook is expected to issue another market trading update and interim management statement on August 11, 2011.